How to Reduce Your Packaging Costs & Save Time
As long as there is a product, packaging will always be needed. However, with the ever-changing supply chain landscape, brands are constantly reevaluating costs to make sure spend is optimized. In addition to the pandemic, multiple other factors such as evolving consumer behavior, raw material supply, labor supply, and logistic demands have been driving up the costs across the supply chain. These increases force companies in industries ranging from food, chemicals, personal care, and more to reevaluate every aspect of their operations, especially their packaging. In this article, we will explore how to analyze your packaging solution and discover costs that can be saved beyond the primary packaging.
Factors that Influence Packaging Cost
A cost-effective packaging solution starts with the packaging. Packaging that is cost-effective may not be the cheapest. Understanding the foundation of how to choose the right packaging will narrow down the best solutions for your product, but what can inadvertently cause packaging to be costly?
Selecting a package dimension that doesn’t fit your product results in excessive space. Too much space within a container can cause the product to shift and possibly damage the product or container, especially during transportation. This is applicable to both your primary and secondary packaging. A damaged product is costly, but a damaged container leaking product that damages other products is an even greater liability to avoid. In addition to the risk of damage, you would also be paying for the extra ‘air’ (unused space) with every shipment. Not all space is bad, some products need the space within their primary packaging to breathe as its transported through different environments. However, you
may discover space can be optimized with your secondary packaging such as maximizing space on a pallet for more product to fit. Staying aware of the space your product travels through can help uncover cost savings.
A few extra seconds in an inefficient workflow can quickly add up to days of labor costs. Although it may be a priority to make sure your product is packaged with utmost care or packaged in a way that provides a unique experience to the consumer, time equates to labor costs that can quickly add up. How can you decrease packing time? Be aware of every step in your packing process. This may help you uncover unnecessary steps that may have been previously overlooked. Once product demand reaches a point where manual packing is no longer able to efficiently keep up, automation is the next step to help streamline. Automation is a major investment that can reduce packing time by increasing output, reducing labor waste, and minimizing material waste. Even when automation equipment is in place, it’s still a best practice to evaluate your packing process to make sure packing times are optimal.
Packing materials may not immediately be a priority when evaluating your packing solution, but damaged products can be extremely costly. Ineffective packing materials or incorrectly packed product that fails to provide protection during transport can result in wasted time, labor, and material costs. Having too much packaging can also be detrimental if you’re stuck with storing excess materials which ties up cash flow. For multiple product SKUs in varying sizes, it may be tempting to find unique packaging that perfectly fits each SKU. However, limiting your packing materials to accommodate different-sized products, will reduce space needed for storing excess packaging and increase cash flow. When analyzing your product and the packing materials needed to ensure a safe journey, make sure to test your solution.
Packaging Factors that Influence Shipping Time
A variety of factors can affect shipping times, many of which are caused by external factors such as bad weather. However, there are a few packaging factors you can consider internally that can help minimize shipping delays.
Finding the right packaging to protect your product is the first step, but making sure your solution is readily available when you need it can impact the packaging’s effectiveness. Uncommon packaging that few suppliers carry, internationally sourced materials with long shipping times, or even having too many components from different suppliers can ultimately impact your shipping time to end users. Consolidating your packaging source with a trusted supplier will save you time and costs.
Although it may be ideal to package all components of your product into one package with optimal additional packing materials for safe transportation, every ounce of the final package needs to be accounted for when it’s time to ship. Once your package crosses a certain threshold for weight, the logistics of transporting your product can quickly grow complicated allowing room for error, delay, and costs. Making sure your product is efficiently shipped may even require you to divide your product into pieces for shipping.
Pack Redesign Can Help Reduce Cost & Improve Shipping Time
What is pack redesign? Pack redesign is the opportunity to evaluate and improve your packaging solution. Packaging will always be an integral part of a product, but it is a component that can be optimized. Many companies will revisit their packaging as they grow to search for savings that can be used to support other parts of their operations. How can pack redesign save time and money? By analyzing the factors which are influenced by your packaging solution, you may uncover opportunities to improve and ultimately provide cost savings to your bottom line. Finding waste in the soft costs affected by your packaging can quickly outweigh an extra few cents to make sure the correct solution is in place.
Your Packaging Partner
At Paramount Global, we have partnered with companies across a spectrum of industries and have developed an eye for identifying cost savings throughout their packaging supply chain. On the surface level, Paramount is a packaging provider. However, the value that fortifies long-term partnerships is our dedication to making sure we provide additional services that will serve the overall customer’s company goals instead of only filling an immediate need. Services include inventory management, just-in-time delivery, warehousing, and more to ease supply chain logistics for the customer. In addition to the relief we provide, our industry insights will make sure the solution provided is also optimal for your company’s goals. We strive to constantly remain aware of our customer’s ever-changing needs and proactively provide solutions to help customers efficiently achieve their goals. Interested in an audit of your packaging supply chain and what cost savings may be uncovered with your packaging solution? Learn more about how Paramount can help simplify your packaging by speaking with one of our packaging specialists today by contacting us here.